The Hartford 2008 Annual Report Download - page 806

EXHIBIT 12.01
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(In millions) 2008 2007 2006 2005 2004
Income (loss) from operations
before federal income taxes and
cumulative effect of accounting
changes $ (4,591) $ 4,005 $ 3,602 $ 2,985 $ 2,523
Add:
Fixed Charges
Interest expense 343 263 277 252 251
Interest factor attributable to
rentals and other [1] 70 69 77 69 64
Interest credited to contractholders
[2] (8,533) 2,022 3,553 5,671 2,481
Total fixed charges (8,120) 2,354 3,907 5,992 2,796
Total fixed charges excluding
interest credited to
contractholders 413 332 354 321 315
Earnings, as defined (12,711) 6,359 7,509 8,977 5,319
Earnings, as defined, less interest
credited to contractholders $ (4,178) $ 4,337 $ 3,956 $ 3,306 $ 2,838
Ratios
Earnings, as defined, to total fixed
charges [3] NM 2.7 1.9 1.5 1.9
Earnings, as defined, less interest
credited to contractholders, to total
fixed charges excluding interest
credited to contractholders [3] [4] NM 13.1 11.2 10.3 9.0
Deficiency of earnings, as defined, to
fixed charges and preference
dividends [5] $ 4,591 $ — $ — $ — $ —
[1] Interest factor attributable to rental and others includes 1/3 of total rent expense as disclosed in the notes to the
financial statements, capitalized interest and amortization of debt issuance costs.
[2] Interest credited to contractholders includes interest credited on general account assets and interest credited on
consumer notes. For the year ended December 31, 2008, the $(8.5) billion in interest credited to contractholders was
primarily due to $(10.3) billion in investment income losses and mark-to-market effects of equity securities held for
trading supporting the international variable annuity business.
[3] NM: Not meaningful.
[4] This secondary ratio is disclosed for the convenience of fixed income investors and the rating agencies that serve them
and is more comparable to the ratios disclosed by all issuers of fixed income securities.
[5] Represents additional earnings that would be necessary to result in a one to one ratio of consolidated earnings to fixed
charges and preference dividends. This amount is primarily due to before-tax realized losses of $(5.9) billion, which
includes before-tax impairments of $(4.0) billion.
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009